Savannah Petroleum Share Discussion Threads

[lithological heterogeneities] 13/7/2017 15:25

8 June 2017


"As part of the Proposed Transaction it is envisaged that the transaction consideration will involve a mixture of debt, equity and cash being issued to the vendor."

I was not a fan of this when they announced it as it involves "debt, equity and cash being issued" which could lead to dilution and a fall in share price post deal. Then we would have to wait for the JV to double it back to the price I bought in at.

Don't get me wrong, the assets are huge, but I only see this working if we get an amazingly cheap rice for them causing a huge share price rise on re-list.

But,for me, I really do not like being in Nigeria one bit. Awful place to be involved in oil & gas. Just awful.

[divmad] 13/7/2017 15:24

Debt for equity swap?

[dorset64] 13/7/2017 15:19

lol thats the whole point I'm making. 7E are full to the brim of debt, and due to the closure of some points of their operation they are in even further debt now than before. SAVP are wanting their assets, and unless those assets can service the debt there is no way they would take them on, or 7E shareholders release assets but no debt.

The only way this deal can go ahead is if either SAVP pays 7E cash for their assets and thus, enough to settle all their debts, which is ridiculous, or SAVP takes on the rest of their debt, which again would be suicidal. Other that all the debt being unsecured there's no way SAVP can afford to take this on so unless the cost is minuscule or the debt written off until future years, I just dont see value in it.

[lithological heterogeneities] 13/7/2017 15:13

Also, how will this affect the planned $250m JV deal that we have been promised repeatedly that would have doubled the share price immediately prior to drilling (and the main reason for my investment).

I was expecting the JV to happen in JUNE as we were repeatedly told would happen causing the share price to double to atleast 80p (IN JUNE) before we began our 100+ well campaign.

Did they know about this deal, will the JV even happen after this.If it does,how long will it now take,weeks or months ?

[divmad] 13/7/2017 15:13

From 38p to £1.50 post-suspension. Any precedent for that on AIM?

[lithological heterogeneities] 13/7/2017 15:10

Of course, if we get the assets mega cheap and we re-list at £1.50-£2.00 or more then its a great deal :0)

It all depends on how cheap we get them.

[lithological heterogeneities] 13/7/2017 15:06

ngms2713 Jul '17 - 11:17 - 874 of 894
This totally and utterly wipes out any significant impact of the upcoming Niger exploration.
This isn't the Company I became an owner of.

100% agree. Getting involved in Nigeria is BAD news. Yes,it might be offset to a large degree if we get the assets really cheap...but there is a reason they are in financial difficulty....NIGERIA !

Not only that but we should be concentrating on OUR 100+ well drilling programme....this could add months to the planned start and have a huge slowing down on our existing project in the future as we will have to spend huge amounts of time & resources keeping an eye on this completely UNWANTED (by me anyway) Nigerian money pit.

[divmad] 13/7/2017 15:06

errr....because they breathe a collective sigh of relief to unsaddle themselves of that debt burden gnawing away at the insufficient cash flows?

[thegreatgeraldo] 13/7/2017 15:05

Dorset, that's absolutely brilliant.... so the holders of the senior secured debt are just going to shrug their shoulders, put it all down to experience & walk quietly away!!!! ABSOLUTELY BRILLIANT!!!!

[buffythebuffoon] 13/7/2017 15:01

Dorset, I think you are the one making yourself look a tit.

Why don't you read the RNS again and read between the lines?

Why would they sell to us if we didn't assume the debt?


Buffy

[dorset64] 13/7/2017 14:59

thegreatgeraldo13 Jul '17 - 14:47 - 891 of 892

Why don't you read the RNS release' yourself before making yourself look a tit. In the RNS it states that they are going to purchase by way of a reverse t/o all of the O&G ASSETS of said company, it mentions nothing of their debt.

This implies that we are going to 'pay' for it, with my point being I trust they won't take some of their debt in place of putting hard cash/shares/others down in place of it.

[buffythebuffoon] 13/7/2017 14:57

TGG, but isn't that what Zengas must be implying?

Seplat have twice the debt of 7E and far more production. Would you want to take them on?

We have great assets and the money for a drilling campaign. Why not at least prove those up first before empire building, or worse, AK just walking away and taking whatever he's negotiated with 7E.

Is AK shareholder focussed or just AK focussed?

That's it.

The moron can vote the post down now. Better hurry up though, as it's nearly time for tea then bed.

Buffy

[dorset64] 13/7/2017 14:37

Hi Zengas, the only issue for me is not so much if/how much they pick the assets up for, but more that thats all they should be picking up. If they include any of the debt in their acquisition the 7E will be laughing all the way to the bank.

7E have a duty to look after their own shareholders and thus create the best deal they can get, and in turn not give away their assets for next to nothing whilst still retaining the debt, although they could perform a 'Phoenix' by way of a deal with SAVP, but that would be very underhand to all shareholders.

And if we look at the share price chart, I would guess those in the know of this 'deal' started to sell down their holdings and thus induced the suspension. We all have to wait for the final details but on the face of it, I'm not happy and as I've said before, lets get what we have in profit before ruling the whole world.

[zengas] 13/7/2017 14:19

I would refer back to my post re UK listed Nigerian Seplat and their valuation of £620m and $635m debt.

Seplat could be a future or near term valuation template if 7E is picked up at a significant discount and provides cashflow with the interest payments out of the picture or reduced. (See 7E assets/production in previous TTT post).

Seplat net 2P reserves 462 mmboe + 90 mmboe 2C. Net entitled 20,922 boepd of which 5,100 of that total figure is oil. (Q1 2017).

While Forcadpos is up and running again, of note is a *new 3rd export route* to be completed which would also benefit 7e. Something to consider as an incentive in acquiring 7e assets.

[thomasthetank1] 13/7/2017 13:14

Mirabaud note on SAVP

Savannah Petroleum – Stalking Seven

In a brief statement today Savannah Petroleum (SAVP LN) has revealed the identity of its reverse takeover target, following recent speculation in the industry press. The company confirmed that it is in talks with Seven Energy International, a privately-owned Nigerian focused E&P that has run into financial difficulty (outstanding debt ~US$868m) and is now effectively controlled by its creditors.

Seven has two core businesses in the Niger Delta – an oil business in the northwest and a gas business in the southeast – which deliver combined net production of ~25 kboepd (50:50 split) and hold substantial net 2P reserves of 252 mmboe (2P + 2C of 387 mmboe). The oil business is held through a Strategic Alliance Agreement with NPDC covering Seplat-operated licences OML 4, 38 and 41 in which Seven funds NPDC’s costs in exchange for a share of its production. Meanwhile, the gas business is fully integrated and includes interests in two producing marginal fields (Uquo & Stubb Creek) and a midstream arm that delivers gas to power plants and other end users in the Calabar area.

Savannah’s proposal to acquire large parts of Seven Energy’s asset portfolio would mark an acceleration of its diversification strategy and follows last year’s entry into Nigeria through an exploration tie-up with NNPC/NNDC in the north. Through this proposed acquisition, Savannah is set to become a substantial oil & gas producer transforming it from a pure-play explorer into a full cycle E&P business in West Africa, comparable in size to some of London’s main board listed mid-caps. Although the deal structure is yet to be revealed, the assets are clearly large, well established (US$2.4bn invested to date) and highly prospective, and we expect more details to emerge over the coming weeks.

[thegreatgeraldo] 13/7/2017 13:01

Who's judging, their oil production was shut in & their gas customers weren't paying....

[trulyscrumptious] 13/7/2017 12:49

Why are some people judging something they have no knowledge of?

[gray1107] 13/7/2017 12:49

The liquity issue is over (this time);

Shell Reopens Forcados Terminal For Crude Export
June 8, 2017
...
Seplat Plc has applauded the development stating that since reception injection of oil and condensate gas into the Forcados system, it has been able to reinstate gross production at OMLs 4, 38 and 41 to pre – force majeure level of about 75,000 bpd and 290mn cubic feet per day or 125, 000 barrels of oil equivalent per day gross (56,000boe/d net to Seplat’s 45 per cent interest).

In contrasts to the company’s first quarter 2017 production report it submitted to the Nigerian Stock Exchange (NSE) in April of 7,721bpd only plus 211mn cubic feet per day.